USDA report projecting tight corn supplies sends futures soaring

Corn futures have more than doubled in value over the past year, and a new report from the U.S. Department of Agriculture (USDA) that projects corn inventories to fall sent the commodity to its highest level in more than three years.

Bloomberg reports that U.S. stockpiles before the start of the 2012 harvest could fall to 695 million bushels, which would serve as the lowest level since 1996. This is troubling agriculture economists who noted that farmers are harvesting a record crop right now.

Furthermore, world corn stockpiles are likely to drop to their lowest levels since 2004 next year, the USDA concluded in its report. In a report to clients, Commodity Information Systems president Bill Gary said corn futures could shoot higher as the year goes on as supplies tighten.

"Today's report should be viewed as very bullish," Gary wrote, as "ending stocks were forecast at the second tightest level in history."

On the Chicago Board of Trade on Thursday at 12:30 p.m., corn futures for July delivery jumped 2.6 percent, or 20 cents, to trade at $7.84 per bushel.